Horton v. New York Life Ins. Co.

• Decision Date: 30 June 1899
• Citation: 151 Mo. 604,52 S.W. 356
• Court: Missouri Supreme Court
• Parties: HORTON v. NEW YORK LIFE INS. CO.

52 S.W. 356

151 Mo. 604

HORTON v. NEW YORK LIFE INS. CO.

Supreme Court of Missouri.

June 30, 1899.

INSURANCE CONTRACT — DEFAULT IN PREMIUMS — RIGHTS OF BENEFICIARY.

1. The annual premium on a policy was $198, but the insured, by payment in advance of $225, received a receipt acknowledging payment of the same as premium for two years, on condition that, should the application not be accepted by the foreign insurance company, the note should be returned on surrender of the receipt; otherwise, to remain in force. The application was accepted at the home office of the company, in New York, which executed a policy, and transmitted it to the company's general office, in Missouri, through which it was transmitted to the local agent, to be delivered to insured on payment of the premium. Held, that the contract was not consummated in New York, by the delivery of the policy in the state, so as to be governed by the laws of the state.

2. Under Rev. St. 1889, § 5856, providing that, after the payment of two full annual premiums, the holder is entitled to have its net value on failure to pay the third premium computed according to the rule laid down in the statute, where insured paid the premium for two years, and then defaulted, and died within four months thereafter, his beneficiary was entitled to recover on the policy the rate provided by such section.

In banc. Appeal from circuit court, Bates county; James H. Lay, Judge.

Action by Charles E. Horton against the New York Life Insurance Company. Judgment for plaintiff. Defendant appeals. Affirmed.

F. N. Judson, for appellant. Hoss & Scott and Seebert G. Jones, for respondent.

VALLIANT, J.

This is a suit on a life insurance policy issued by defendant on the life of T. Lisle Standish, deceased, in his lifetime, payable at his death to his administrator. The petition states that the contract of insurance was entered into November 30, 1892, under the terms of which plaintiff's intestate paid defendant $304, and defendant delivered to him the policy on his life for $10,000, payable to his administrator, and specifying on its face that, for the consideration paid, it was in full force for two years, to November 30, 1894; that Standish died February 14, 1895, having prior to his death paid two full annual premiums on the policy, whereby, under the statute law of this state (section 5865, Rev. St. 1889), the policy was in full force at the time of his death. The answer admits the issuing of the policy, the consideration for which, it avers, was the agreements contained in the written application therefor, and the consideration of $304 paid in advance, "being the premium for two years' term insurance, being less than the aggregate of two full annual premiums; and said policy was conditioned upon the payment thereafter, to wit, on the 30th day of November, 1894, and annually thereafter, of the annual premium of one hundred and ninety-eight dollars." The answer further avers that the policy was delivered to the insured, and the first premium of $304 was paid, but the premium due November 30, 1894, was not paid then, nor within the days of grace stipulated, nor ever, and thereby the policy lapsed and became of no force. Defendant also pleads that it is a corporation domiciled in New York, doing the business of insuring lives on the mutual plan only, "administering the assets derived from the premiums of its policy holders solely for the benefit of said policy holders, by and in whose behalf such premiums are paid"; that "among the plans of insurance adopted by defendant in said mutual business was that known as the `Distribution Policy Plan,' with twenty-year distribution period, where-under all the policies issued on said plan in any one year to policy holders in the different parts of the world constitute a class, and all profits and surplus derived from premiums on all said policies during said period of twenty years were accumulated until the end of said period, and then distributed for the benefit of such policies as should be in force at the end of such period, and thereby each of the said policy holders of said class acquired a contingent interest, in the event of survivorship of said period, in the profits and surplus which might be realized from the premiums on their policies in said class"; that this was the plan of insurance for which plaintiff's intestate applied, and the plan on which the policy in suit issued; that this plan of insurance included, as an essential feature, the provisions of the statute law of New York in reference to the nonforfeiture or extended paid-up insurance; that the calculations on which the character of insurance is based are made on the New York statute, and it is a part of the contract of insurance between every policy holder in that class, and the company for all, that the New York statute shall govern and be a part of the contract, and the policy holders in that class are entitled, among themselves, and as against the company, to the shares and profits that would accrue by enforcing the provisions of the New York statute; that plaintiff's intestate expressly agreed in his application that the contract should be governed by the New York statute, and having so agreed, and on the faith thereof having been admitted to that class, the plaintiff is now estopped to say the contrary; that, by the terms of the New York statute, premiums for full three years were required to be paid before the holder of the policy would be entitled to have the reserve or net value applied to extend the insurance; that to hold that the Missouri statute governs the policy, in spite of the agreement to the contrary, would be to deny the parties the right to make a contract, and violate their rights under the bill of rights in the constitution of Missouri and the fourteenth amendment to the constitution of the United States. The reply denied all the allegations in the answer not admitted in the petition.

Upon the trial a jury was waived, and the cause was submitted to the court upon the pleadings, the policy, with conditional receipt thereto attached, the depositions of A. F. Harvey on behalf of plaintiff, and C. C. Whitney on behalf of defendant, and the following agreed statement of facts: "First. Plaintiff is the administrator of T. Lisle Standish, the insured named in the policy, duly appointed and qualified as such. Second. T. Lisle Standish, the insured named in the policy, died on the 14th day of February, 1895, and within ninety days thereafter proofs of his death, in due form, were furnished to the defendant at its home office, in the city of New York. Third. At the date of the issuance of this policy the only statute of the state of New York regulating or in any manner relating to the forfeiture of life insurance policies was contained in section 88, art. 2, of chapter 690 of the Laws of 1892 of the State of New York, and is correctly set out in the answer herein. Fourth. Said T. Lisle Standish, the insured named in the policy, was at the time of his application therefor, and continually till his death, a resident of Hume, in Bates county, Missouri. His application for the policy was there made to the local agent of the defendant, and forwarded by said agent to the home office of the defendant, in the city of New York. Upon the issuance of said policy it was forwarded by the defendant, through its St. Louis office, to said local agent at Hume, and delivered by him to said Standish, at Hume; the first premium having been theretofore paid to the said agent for the defendant. Fifth. Default was made by said Standish in payment of the premium due on November 30, 1894, due notice of said premium having been given to said Standish; and said premium then defaulted, and has not since been paid, nor has any subsequent premium been paid upon said policy. Sixth. If plaintiff is entitled to recover at all in this action, he is entitled to recover the amount of the face of his policy, the ten thousand dollars ($10,000), less the amount of ordinary life premium on said policy unpaid, to wit one hundred and eighty-eight dollars ($188), with interest thereon to April 19, 1895, to wit, five and twenty-nine hundredths dollars ($5.29) making the total amount deducted of one hundred and ninety-three and twenty-nine hundredths dollars ($193.29), leaving in value of claim nine thousand eight hundred and six and seventy-one hundredths ($9,806.71), with interest thereon at six per cent. from April 19, 1895."

The policy, which was in evidence, is thus described by the expert witness: "It is a policy for the whole life, for ten thousand dollars, payable by premiums running during twenty years, of which the first two are made by one reduced payment, issued on the 30th day of November, 1892, in favor of T. Lisle Standish. * * * It is a combination of term insurance and life insurance. It is not strictly a term policy for two years, because it has a reserve at the end of two years, applicable to continuance of the premium payment in part. Q. What is the difference between this form of policy and the ordinary twenty year payment policy issued by this company? A. No difference at all in respect to the amount of premiums which are paid during the twenty years. The sum of the premium for the ordinary twenty-year policy, and the sum of the premium in this contract for the same age, would be exactly the same. The difference is in the payment of the first two years' premiums by combining them into one payment. The sum...